The English Court of Appeal (CA) has set out guidelines to assist the Patents Court.

The origin of these guidelines

The CA's guidelines are set out in its judgment in Glaxo Group Ltd v Genentech Inc. and Biogen Idec Inc. The patentee-defendants to a revocation action applied to stay the UK proceedings pending resolution of the parallel European Patent Office (EPO) opposition. A stay was refused at first instance by Lewison J. However, Lewison J in his judgment stated that the current practice on stays in patent cases appeared to be out of line with that in general commercial cases. As recent patent decisions stem from obiter dicta of Aldous LJ (in particular Kimberly-Clark v Procter & Gamble [2000]) to the effect that there is a presumption in favour of a stay, Lewison J felt it would be helpful if the CA provided guidance by way of ratio.

The CA upheld Lewison J's refusal of a stay and went on to set out guidelines for the conduct of future patent stay cases. This update does not examine the facts of the case but instead considers the guidelines.

The outcome

The decision whether or not to grant a stay was a matter for the Patents Court, exercising its inherent discretionary powers. Although the Patents Act 1977 and the European Patent Convention (EPC) do not contain express provisions relating to stays, they provide the backdrop and context to the issue. This distinguishes patent cases from the general commercial position as set out in The Spiliada and other forum conveniens cases. The possibility of duplication of proceedings challenging the validity of a European patent is inherent in the system set up by the EPC.

Key factors

The CA considers that the key factors to take into account when considering granting a stay of UK patent proceedings, pending the outcome of a parallel EPO opposition are:

  • The pendency of the EPO opposition compared with that of the national proceedings. In the CA's view, this is the most significant factor. If the Patents Court proceedings would resolve some uncertainty significantly sooner than the EPO opposition, "it would normally be a proper exercise of discretion to decline to stay" the UK proceedings.
  • Duplication of proceedings is not (by itself) a ground for staying proceedings as this is inherent in the EPC system.
  • If the evidence shows that there would be "some commercial certainty" achieved at a considerably earlier date in the UK as compared to the EPO, then the Patents Court is entitled to refuse a stay.
  • "Much weight" ought to be attached to the evidence of the party resisting the stay and "contentions of a competitor that there is no commercial need for early resolution of validity should be viewed with suspicion".
  • Other considerations, such as additional costs of parallel proceedings, are of lesser relevance than of achieving some commercial certainty somewhere sooner.

Comment

The CA's clarification of the circumstances when a stay is appropriate is to be welcomed but some aspects of the above guidelines require comment:

The evidence of the party resisting the stay

  • It appears that this party need only show that "some" commercial certainty would be achieved in the UK sooner than before the EPO. This is not a high bar. Also, "much weight" should be attached to this evidence and the counter-evidence of the party requesting the stay may be viewed with "suspicion". Given this guideline, it is difficult to see how a stay would be granted in the usual commercial circumstances.

Costs of duplicate proceedings

  • Traditionally an application to stay was led by evidence as to the duplication of proceedings wasting court time and the parties' resources. Under the new guidelines, duplication is no longer a factor and the wasted costs issue is of minor relevance. This appears to ignore the relative size of the parties to a patent action, for example consider an SME-patentee defending UK revocation proceedings and opposition proceedings in parallel brought by a multi-national.

Courts in many other Continental jurisdictions (e.g. Germany) routinely stay national proceedings pending EPO opposition proceedings. Although in recent years we have seen a trend-shift in the UK (from anti-stay to more pro-stay), the consequence of these guidelines is that stays are likely to be a thing of the past.